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Mega-boffins at Cambridge University have come up with a way of making mega-cheap microchips from plastic and they have the funding to prove it.

Intel and AMD are not shaking yet in their silicon boots, despite claims from Plastic Logic, the company taking on the commercialisation of the technology, that the technique will be a "machine for making money."

The new chips are likely to target areas where, so far, the high production costs have kept chips out of a device - for example in place of barcode scanners at a supermarket or in clothes labels.

Even taking this into consideration the industry is expected to be worth $10 billion annually by 2004. By contrast, the silicon business is valued at $200 billion now, rising to $1000 billion by 2004.

The idea of using plastic in place of silicon is not new. In the 1970s boffins found a way of making plastics carry a flow of electrons. Since then the idea has been considerably refined.

The plastics the group is working with are part of a family known as polythiophenes and of oligothiophenes. The properties of the plastics must be very finely controlled if they are to represent a serious challenge to silicon.

Plastic Logic says it intends to build up the layers of the various compounds using a process similar to industrial inkjet printing. They will have to work out how to "squirt" several different types of chemicals at once to produce a serial printing process similar to the gravure printing used in publishing.

At present, inkjet nozzles can achieve resolutions of about 25 microns, compared to the latest die size of 0.13 microns, using silicon.

The main advantage plastic would have is its cost of production. Current semiconductor fabs can cost up to $2 billion to build and get running. This keeps the cost of a chip relatively high, at least a few dollars. The plastic alternative could be as cheap as a few pennies each.

Thee players in the field reads like a who's who of IT. IBM, Mitsubishi, Hitachi, Lucent, Xerox, Phillips and Hoechst have all announced research programmes into making plastic chips. However, none has come forward with plans to make commercialise the process

Plastic Logic is backed by Amadeus, the VC outfit run by Acorn co-founder Herman Hauser. ®